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Jun 30, 2023
Two Harbors Q2 2023 Earnings Report
Two Harbors reported financial results that benefitted from attractive spreads and lower volatility.
Key Takeaways
Two Harbors Investment Corp. reported their Q2 2023 financial results, which showed a comprehensive income of $31.5 million, or $0.31 per weighted average basic common share. The company's performance was supported by lower volatility and attractive spreads. They also settled $14.8 billion unpaid principal balance (UPB) of MSR through flow-sale acquisitions and three bulk purchases.
Reported book value of $16.39 per common share, and declared a second quarter common stock dividend of $0.45 per share, representing a 2.2% quarterly economic return on book value.
Generated Comprehensive Income of $31.5 million, or $0.31 per weighted average basic common share.
Generated Income Excluding Market-Driven Value Changes (IXM) of $0.60 per weighted average basic common share.
Reported Earnings Available for Distribution (EAD) of $(3.7) million, or $(0.04) per weighted average basic common share.
Forward Guidance
Company believes that current environment is terrific for investing in Agency and MSR strategy.
Positive Outlook
- Congress passed a resolution on the debt ceiling
- Inflation expectations and the Fed path of rate hikes appeared well contained
- The market readily absorbed the supply of RMBS being auctioned by the FDIC
- Mortgage rates still around 7%, prepayment speeds should remain slow which is very accretive to our MSR asset
- Volatility subsided and spreads tightened across the coupon stack leading to positive returns for RMBS
Historical Earnings Impact
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Avg. Return Before/After Earnings
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